"It consolidates a competitor. It actually provides us additional opportunities with customers," said Brian Bronson, RadiSys' chief financial officer, who will take on the additional title of president once the deal is complete.

Oregon companies have a long history of selling out to larger businesses out of state, but it's relatively rare for a state-grown tech company to make an acquisition this large. There hasn't been a bigger one since 2007, when Integra Telecom purchased Eschelon Telecom for $710 million.

And it's even more unusual for the CEO of the acquired company to take the helm of the buyer.

Continuous Computing CEO Mike Dagenais will move to Oregon to run RadiSys after the deal closes. Current CEO Scott Grout will become vice chairman of the merged company.

"The board and Scott Grout thought the best combination ... for the company moving forward is for Scott to be vice chair," Bronson said. Grout has been RadiSys' CEO since 2002.

RadiSys makes standardized hardware components that other companies use as building blocks for communications networks and other electronics. But the company has been shifting to emphasize software services, a faster growing and more profitable market.

Privately held Continuous Computing makes similar technology to increase the capacity of mobile broadband networks, with a particular focus on high-speed wireless communication. That's a hugely popular market in this era of smartphones and tablet computers.

Continuous Computing reported $56.6 million in revenue last year, up 25 percent from 2009. Its gross profit margin was 50 percent, according to RadiSys.

By comparison, RadiSys reported 2010 sales of $284 million and a gross margin of about 30 percent. (RadiSys actually reported a net loss for the year due to research, marketing and other business costs.)

RadiSys will pay $73 million in cash for the company, plus 3.7 million shares of stock valued at $31.9 million. The deal could pay out an additional $15 million based on subsequent sales results.

The deal adds 375 employees to the 550 RadiSys already employs. More than 200 work at its Hillsboro headquarters.

RadiSys had $132.8 million in cash at the end of March. The company had been under pressure from its largest shareholder -- Camas, Wash.-based investment fund manager David Nierenberg -- to put that money to work. Nierenberg, who holds nearly 19 percent of RadiSys' stock, joined the company's board in March.

"I have been able to participate in much of the board's deliberation about making this acquisition and about the resulting changes in management," Nierenberg said Tuesday in a statement. "I fully support what the company announced today and believe it has the potential to create substantial shareholder value."

Also Tuesday, RadiSys reported $73 million in first-quarter revenue – up 9.4 percent from the same quarter last year, and above the company's forecast range.

RadiSys lost $529,000 in the quarter, or 2 cents a share.

The company's shares rose 1 cent Tuesday to close at $8.70 before it announced its acquisition and financial results. In the last year, RadiSys has traded between $8.01 and $10.95.